This currency play is causing a quiet storm

As many global currencies experienced volatile trade in recent weeks, amid uncertainty over when the U.S. Federal Reserve will start tapering off its bond buying program, one relatively unnoticed currency pair has been offering traders lucrative gains.

The Canadian dollar has appreciated near 10 percent against the Aussie dollar since mid-April, boosted by both weakness in the Australian dollar and strength in the U.S. currency. The Aussie-Canadian dollar pair was trading at 0.95 on Friday.

Ilya Spivak, currency trader at San Francisco-based online forex trading firm FXCM, told CNBC that buying the Canadian dollar versus the Aussie dollar was the ideal way to play the U.S. recovery and the slowdown in China simultaneously.

"It's a very good way to get a China versus U.S. growth proxy trade, because essentially what you have is a commodity producer dependent upon the U.S. versus a commodity producer dependent on China," he added.

Canada's economy has been showing strength in recent times amid signs of a recovery in the U.S., which is its largest trading partner. In May the U.S. was the destination for 75 percent of Canadian exports, Reuters reported. Earlier this month the International Monetary Fund upgraded Canada's growth expectations for 2013 to 1.7 percent from 1.5 percent.

Meanwhile, fears over a slowdown in China, Australia's largest trading partner, have damaged sentiment in Australia and its currency has taken a beating as a result, falling near 13 percent against the U.S. dollar over the past three months, as Fed tapering anxiety also took its toll.

"We know China is slowing, we know the U.S., as far as data is showing us, is presumably relatively resilient in relative terms, and so it [Aussie-Canadian dollar trade] is not a bad idea," added Spivak.

Boris Schlossberg, managing director of U.S. firm BK Asset Management, said he favored buying the Canadian dollar against the Aussie as a good way to play out his view that the Canadian economy would outperform Australia's.

According to HSBC, Australian GDP growth is likely to be below trend in 2013 at 2.5 percent, before returning to trend at 2.8 percent in 2014.

"One of the most interesting trades is the Aussie-Canadian dollar short," said Schlossberg. "I used to love this trade for a long time. It's making fresh yearly lows and it may go even further because the idea that Canada might outperform Australia is taking shape in a very clear fashion right now," he added.

"I think [it could go to] initially to 0.93 to one Canadian dollar, and depending how the cycle plays out it could go to 0.90. There is still a lot of meat left on the table," he added.

However, FXCM's Spivak added that traders need to act now to buy the Canadian dollar as the Aussie is long overdue a correction.

"The Aussie is heavily oversold, net speculative shorts hit a record high last week so there is room for a correction. But the opportunity is there several weeks or maybe a month out from now," he added.